A rendering of Colorado State University's proposed on-campus stadium, which, if built, would be located along West Lake Street on the south side of campus. / Courtesy of Colorado State University

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Some experts say revenue projections for Colorado State University’s proposed on-campus football stadium are “extreme,” “optimistic” and based largely on an anticipated surge in premium seating interest.

Others say calculations are on the mark, “achievable” and could generate millions — even turn the stadium into a self-sustainable entity — over time.

While it seems logical that one could sit down, analyze financial reports drawn up by a university contracted consultant and make a decision based on black and white numerations, the situation quickly turns to shades of gray. Because, while other factors play in, many believe the potential economic success of an on-campus stadium is intrinsically connected with that of the players CSU puts on the field.

Bearing that in mind, university President Tony Frank has a tough decision to make in advance of the university system governing board’s Oct. 4-5 meeting. And, academics-versus-athletics philosophical debates aside, he’s said it all comes down to the numbers.

Big picture

Frank is considering whether to build a $246 million-plus stadium that would seat roughly 43,000 people, or about 10,000 more than Hughes Stadium, the current home of Rams football.

CSU-hired Conventions, Sports and Leisure International crunched revenue projections that President Bill Rhoda believes are “achievable,” based upon the local/national economic markets, a 6,500-person survey and his company’s 24-year track record of developing more than 1,000 similar feasibility studies for municipalities and college and pro teams.

“They’re not pie-in-the-sky numbers,” he said, backed by CSU Athletics Director Jack Graham’s confidence in his company’s competence. Rhoda added that 95 percent of teams CSL has worked with have “exceeded projections that we have put together.”

Having full access to CSU’s financial records, CSL developed three funding scenarios: “low,” “base” and “high.” Because “base” projections are considered to be expected, these are the values a Coloradoan analysis focused on; though, attention was paid to all figures.

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On the low end, an on-campus stadium is projected to generate $6.35 million in its first year of operations; base-level revenues total $11.32 million; and the high-level scenario reports an $18.31 million first-year gain, according to CSL’s “Year 1 Operating Comparison,” dated Aug. 8, delivered to Frank in a stadium feasibility study last month.

According to CSU, Hughes revenues came in at $5.87 million for the 2010-11 season.

After expenses, the stadium could generate $42.37 million in annual revenue by year 30, under CSL’s “Base Operating Scenario Financial Projections,” dated May 30. Among a list of many, key economic drivers listed in CSL’s projections include individual-game tickets, season tickets and premium seating donations.

An analysis of CSL’s projections shows CSU, to hit the baseline figures, would have to:

• Increase season ticket revenue by 230 percent — from the $953,820 collected in 2010-11 to $2.2 million — and increase individual game ticket revenue by 316 percent to $4.09 million per season.

• Outperform 2010-11 priority seat donation revenues by 184 percent — the difference between about $1.38 million and $2.55 million.

Premium seating debate

While only one part of the puzzle, respondents’ answers helped develop CSL’s recommended building plan, which calls for between 38 and 55 suites (of different types), 900 to 1,300 club seats, 1,100 field-level club memberships and 6,000 to 7,000 priority seats to be included in the new stadium.

Rhoda is confident in the response rate and feedback he said shows there are people who want premium seating.

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Respondents were most interested in field-level club memberships, according to CSL’s report, followed by club seats, priority season tickets and loge boxes. At one point, too, CSL bumped premium seating numbers down from an original proposal to better match estimated demand.

Others, however, argue the survey results don’t paint a clear picture and contribute to a elevated baseline.

“It’s a figment of their imagination,” local accountant and former Fort Collins Mayor John Knezovich said of CSU’s aim to sell more premium seating, should the on-campus stadium go up. As a fixture in the community for more than 40 years and a regular football game attendant, Knezovich doesn’t believe there’s a large enough pool of interested ticket buyers to draw from without the incentive of a high-caliber team.

Of the 12 suites currently available at Hughes, CSU was able to sell 10 in the 2010-11 year. Victor Matheson, who specializes in sports economics and the impact of stadiums and special events, joins Knezovich in the belief that the survey response rate wasn’t high enough to represent a valid sampling of community interest in the proposed stadium’s seating.

Matheson, an associate professor of economics at the College of Holy Cross in Worcester, Mass., said he would be “very hesitant” about making long-term financial decisions based on these numbers. Fort Collins has a relatively small general and business population, compared to other college football towns, he said, and he’s not sure whether CSU could match CSL’s premium seating projections.

“All of the numbers I looked at just assumed huge increases in demand,” he said, pointing specifically to premium seating estimations.

“And it’s not clear at all why all of the sudden people would want to go to games — at a much higher price — than they did before.”

CSL’s projections indicate more than half of survey respondents said they’d be willing to pay more for tickets, with 40 percent opposed to any increase.

Attendance

Based upon survey results and a 10-year average of attendance at Hughes, CSL believes a new stadium could draw 22 percent more fans to the stands. That means home game attendance of 30,821 people, according to a low forecast, and 37,370, forecasting high.

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And more people could mean more money.

A new stadium will generate a “big bump” in attendance in the first year, Matheson said, but warned that attendance could level out or even wane over time.

How a new stadium’s appeal would affect home game attendance is “difficult to answer,” Rhoda said.” In some cases, where the team is poor and the university lagging in marketing efforts, attendance bumps “would wear off sooner than later.” But if a team’s good, “that honeymoon period could last forever.”

In its fourth season since building its $303 million TCF Bank Stadium with guidance from CSL, the University of Minnesota has seen CSL’s projections “aren’t far off,“ said Associate Athletics Director Tom McGinnis.

Premium seating projections are “pretty accurate,” ticket sales are “in the ballpark of what we’re recognizing,“ and gameday and overhead expenses are “very close to projections, within $100,000 of each game,” he said.

While CSI projected annual increases each year, ticket sales revenues have fluctuated from season to season, something McGinnis attributes to the Golden Gophers’ performance.

The weight of conference standing

Nine months into his post, Graham has a vision to transform CSU’s Athletics Department.

Plans are to add 15 people — focused on marketing, business operations and garnering corporate sponsorships — and collectively pay them about $1.5 million annually, according to a presentation Graham made to the System Board of Governors in August. There’s the charge of attracting top recruits in all sports — the likes of Olympians and CSU alumnae Janay De Loach and Amy Van Dyken.

And there’s the challenge of fielding basketball, volleyball and football teams that win no less than 60 percent of games each season. After coming out of the gates with a 2008 New Mexico Bowl appearance under coach Steve Fairchild’s watch, the Rams went 3-9 the past three seasons. They’re 1-1 so far this year under new coach Jim McElwain.

Graham and others have argued that an on-campus stadium would bring the university community together, enhance alumni ties (thus, boosting donations) and attract high-caliber student athletes. Others believe money is better spent upgrading historic Hughes Stadium and first enhancing the football program — if the athletes improve, reward them with a new stadium.

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Rhoda believes the success of Rams football is in the “top tier” of factors behind the success of an on-campus stadium, while the local/national economies, people’s perceived value of seats and other factors come into play. But Knezovich and Matheson hold the team’s performance up as the linchpin in the stadium’s success.

Matheson said there are more than 100 other bowl-eligible football coaches shooting for Graham’s same (or better) winning records, making it impossible for all teams to come out in the green. Both he and Knezovich also agreed that, in order for the on-campus stadium to be profitable, CSU has to move up and out of the Mountain West Conference and into a top-tier conference with stronger competition and increased opportunities for time in the TV spotlight.

“We have evidence that (CSU) will attract games if they put a new product on the field,” Matheson said. “But the new stadium isn’t what will attract the fans. It’s the football team.”

“If CSU manages to put a product on the field like Boise State ... they’ve got it made,” he added. “They’re going to fill that field.”